You've Had an Offer for Your Food Manufacturing Business. Is It Fair?
The letter names a price. It does not say how much of that price survives once the buyer has deducted the rebates you owe the supermarkets and the finance on your production lines. An independent valuation shows you the figure that reaches you, in two working days, before you reply.
Owners of food and drink manufacturers usually get in touch at one of a few points. A larger food group wants your capacity or your listings. A private equity-backed platform buying bakeries or chilled producers in your category has written to you. A management team wants to buy, or the family has started asking what retirement looks like.
Every one of those conversations starts with somebody else's figure. The buyer already has a view on how much of your turnover rests with two supermarket buyers, and their technical director will ask for your last BRCGS audit report before anything else. You are the only party in the room without a valuation of your own.
Email Mark for a free discovery callSee what a valuation report containsWhat finding out late costs
An illustrative own-label chilled food manufacturer with £22.0m turnover and reported EBITDA of £2.10m. A packaging supplier's sales rep had told the owner that food businesses were going for seven times, so she expected about £14.7m. The company and every figure are fictional.
| Reported EBITDA | 2,100 |
| Retailer rebates and overriders under-accrued, corrected | (180) |
| Short-life stock and superseded packaging written off | (90) |
| Energy costed at the new contract rate due in April | (150) |
| Technical director costed in to replace the owner's role | (75) |
| One-off costs of clearing a major non-conformity added back | 60 |
| Maintainable EBITDA | 1,665 |
| Enterprise value at an illustrative 5.0 times | 8,325 |
| Cash at completion | 1,200 |
| Asset finance on production lines and vehicles | (1,100) |
| Invoice finance drawn | (650) |
| Rebates and promotional funding owed to retailers, unsettled | (220) |
| Refrigeration replacement flagged at audit, treated as debt | (250) |
| Working capital below the normal level | (150) |
| Equity value to the owner | 7,155 |
The seven times the owner heard described larger businesses, and that alone accounts for more than £3m of the gap between £14.7m and £7.2m. The rest sat in the profit figure and the balance sheet: rebates owed to the retailers had been accrued light for two years, and the refrigeration plant would not see out another audit cycle. The 5.0 times multiple is for illustration only. A real valuation sets the multiple from your own supply terms and site, checked against completed sales of comparable food manufacturers.
Who gave you the figure for your factory, and what do they gain if you believe it?
The figures a food manufacturer hears before a sale rarely come from anyone without an interest in the price, and that includes the packaging rep who mentioned seven times.
The buyer
wants to pay as little as you will accept. A food group already selling into the same retailers knows how their category buyers run range reviews and tenders, and it will price your reliance on two of them before you have worked out what that reliance costs.
A broker
competing for your instruction has a reason to quote high. A large number wins the mandate. Months later the buyer's accountants reconcile your rebate accruals to the retailer terms and go through the chillers for short-life stock, and the figure comes down to meet what they find.
Your accountant
has kept your books for years, but may never have sat opposite a food group's due diligence team. A stock provision or a promotional accrual that satisfies a year-end audit is read very differently by someone looking for reasons to deduct from the price.
None of them is acting in bad faith. Each is answering a question of their own, while yours is what a buyer will pay for this factory and its listings today, and how much reaches you once the asset finance and the rebates owed to retailers come off.
Why our valuation is independent
When we value your business, we have no reason to push the number up or down. The fee is fixed and agreed before any work starts, and it is the same whatever the number turns out to be. You are not signing up to a sale, and nothing in the engagement commits you to anything further.
The report is yours. Show it to a buyer, your bank, your accountant or your family. Every figure in it traces back to one of three valuation methods, with each adjustment explained in the Excel model you receive alongside it.
Owners rarely go on to ask us to sell their business after a valuation, although it has happened. Most come to us because they want a number they can trust before a buyer tells them what it is.
Who does the work, and what a valuation finds
Mark Ross Roberts FMVA CBCA carries out every valuation himself, with 30 years on the deal side of UK mid-market transactions. The largest corporate group he has negotiated against had a turnover of £3.2bn.
96%
In 96% of completed Achieve mandates, the price agreed at heads of terms is the price paid at completion.
Source: Achieve Corporation mandate records
The two summaries below show the kind of finding a valuation produces. They are examples written for this page, not records of real mandates, and they carry that label on the website until real anonymised deals replace them.
Own-label chilled desserts, Yorkshire
- Turnover
- £15m
- Buyer
- A larger UK food group supplying the same retailers
- What the valuation found
- Two supermarkets took most of the output on rolling purchase orders with no signed supply agreement, and rebate accruals were running behind the agreed terms. The valuation restated earnings and the debt-like items before the buyer's accountants did.
- Outcome
- The owner agreed a deferred element tied to the two accounts staying, on terms he had modelled.
Branded snacks, South West
- Turnover
- £8m
- Buyer
- A private equity-backed buy-and-build platform
- What the valuation found
- Recent growth had come largely from multibuy promotions on products within the HFSS rules, which the volume price restrictions in England ended from October 2025. The valuation rebuilt the forecast without those promotions and costed the reformulation already underway.
- Outcome
- The owner answered the first offer with his own forecast and evidence of the reformulated range, so the negotiation started from numbers the buyer could not wave away.
What buyers pay for in food and drink manufacturing
Trade buyers and private equity both pay more for earnings they can see continuing past the next range review. In food manufacturing those earnings show up in a few places, and a buyer's commercial and technical teams check every one of them.
- Listings spread across retailers and channels. A business supplying several grocers, plus foodservice or export, can lose a range review without losing its year.
- Margin that keeps pace with input costs. Cost price increases agreed promptly with each retailer, backed by written terms or indexation, tell a buyer the next rise in flour or packaging will not come out of profit.
- A strong BRCGS grade, held on unannounced audits. Retailers will not list an uncertificated site. A run of high grades with a plus for unannounced audits is factory discipline a buyer would otherwise spend years building.
- Brands with pricing power, or own-label lines retailers find hard to move. A brand with repeat buyers earns margin. Own-label work holds value when moving it means the retailer re-running trials and technical sign-off.
- A factory with headroom. Spare line capacity and chilled or frozen storage, on a site that passes the buyer's engineering review without immediate spending. Capacity is often why a trade buyer approached you.
What pulls the value down
Buyers of food manufacturers apply the same discounts deal after deal, because each one has cost them money before.
- Two supermarkets carrying most of the sales, on informal terms. Many own-label suppliers work on purchase orders and emails rather than a signed supply agreement. A buyer prices the risk of losing the account at the next tender and often defers part of the price until it is shown to stay. The Groceries Code Adjudicator's 2026 survey found 15% of suppliers reported de-listing without reasonable notice (GCA, Annual Report 2025 to 2026).
- Cost increases that reach the price late, or never. Every month between an input cost rise and an agreed price increase comes off margin. In the same survey, 15% of suppliers reported a retailer refusing to consider a cost price increase or delaying the decision unreasonably. A buyer checks how long your last increases took.
- Energy on a contract about to reprice. Ovens and chillers make food manufacturing energy-hungry. A fixed-price contract ending shortly after completion is a cost the buyer models at the new rate, whatever this year's accounts show.
- A factory that needs money spent on it. Refrigeration near the end of its life, or floors and drainage flagged at audit, become capital expenditure the buyer deducts. A recent recall or major non-conformity is found in due diligence and used to renegotiate.
- Promotions that the rules no longer allow. Branded producers whose volume came from multibuy deals on products high in fat, sugar or salt lost that tool in England from October 2025. A forecast that still assumes it gets rebuilt by the buyer.
Most of these can be fixed, or at least evidenced, with twelve months before a sale. Getting your largest retailer to sign a supply agreement changes how a buyer treats that account, and a valuation done early tells you which of these discounts a buyer would apply to your factory and roughly what each would cost you.
How we value a food and drink manufacturing business, and why the multiple comes last
Anyone can take a year's EBITDA from the filed accounts and multiply it by a figure overheard at a trade show or read in the grocery press. A food group's advisers will not price your factory that way, and nor do we. We set the multiple last, once the work below has been through your retailer terms and the state of your site. It comes out differently for every manufacturer, which is why we publish no typical range.
Before any multiple goes near a food manufacturer, we test it on:
- Its defensible moat. What stops a retailer moving the work at the next tender? Recipes and process know-how, accreditations such as organic or free-from, measured service levels, and the cost to the retailer of qualifying a new site.
- The market around it. A PESTLE review of the pressures on the categories it sells into. In England, HFSS location restrictions came into force on 1 October 2022 and volume price restrictions on 1 October 2025 (Food (Promotion and Placement) (England) Regulations 2021; DHSC implementation guidance). Large producers have paid packaging fees under extended producer responsibility from 2025, modulated by recyclability from 2026 to 2027 (Defra, 2025 base fees). Energy prices and shoppers trading down to own label sit alongside them.
- Its competitive position. Porter's Five Forces applied to the business itself. The buying power of the 14 retailers designated under the Groceries Supply Code of Practice matters most (GCA, Annual Report 2025 to 2026), followed by commodity ingredient and packaging suppliers and the ease with which a rival can bid for your own-label lines.
- Its real competitive edge. The specific reason the category buyers keep this supplier, and whether that reason survives the owner stepping back from new product development and the key accounts.
- Capital expenditure. The age and condition of lines, ovens, refrigeration, effluent treatment and the building fabric, what recent audits flagged, and what must be spent to make the forecast achievable.
- Frameworks and contracts. Signed supply agreements, their price review and notice terms, the rebate and promotional commitments in each, and how much of next year's volume is already agreed. The Groceries Supply Code entitles suppliers to designated retailers to reasonable notice before de-listing (paragraph 16), but a buyer prices what the paperwork shows.
- Quality of earnings. Whether recent profits were flattered by light rebate accruals, generous stock valuations, a cheap energy contract that has ended, or maintenance and hygiene spending held back before a sale.
Only then do we value the business three ways: on maintainable earnings once rebates and energy have been restated, on a discounted cash flow of its own forecast with any promotions the rules have removed taken out, and on the net value of its assets, which matters where the business owns the factory and its plant. Where the methods disagree, the gap shows where a buyer will push, and in food manufacturing that is usually the retailer accounts or the refrigeration.
On published multiples. BDO's Private Company Price Index put the median UK trade buyer multiple at 9.8 times EBITDA in Q3 2024, and 12.2 times for private equity (BDO, PCPI Q3 2024). Over the previous four years, the trade deals behind that index averaged an enterprise value of £14.5m (BDO, PCPI Q1 2024). Those averages come from larger businesses and say nothing about how many grocers you supply or what your supply terms let a retailer do at the next tender. For a food manufacturer we treat them as one cross-check on the work above and give them no more weight than that.
We value businesses up to £450m enterprise value. The fixed fees below cover businesses with turnover from £500k to £30m, and larger businesses are scoped on the discovery call.
Where food manufacturing accounts mislead
A food manufacturer's filed accounts can pass audit and still overstate what a buyer will pay for, mostly through retailer deals and stock. We correct for the items below before the buyer's accountants find them.
- Rebates, overriders and promotional funding. Retailer deals often settle months after the sales they relate to. If the year-end accrual is light, profit is overstated, and the unsettled balance is treated as debt and deducted from the price.
- Stock at cost that will never be sold at cost. Short-life finished goods, ingredients near their date and packaging made obsolete by a recipe or artwork change sit in the balance sheet at full value until someone writes them off. The buyer will.
- Energy bought at an old price. A fixed contract signed before prices rose, or a hedge about to expire, makes the current year look better than the next. We cost energy at the rate the business will actually pay.
- Recall and insurance items. A product recall shows up as a one-off cost, and an insurance recovery as one-off income. A buyer asks whether the cause has been fixed before accepting either as non-recurring.
- The owner as technical director or chief product developer. Where the owner writes the recipes, handles the audits or holds the retailer relationships, a buyer costs in a salaried replacement at market rate.
The valuation, the fee and how to start
You receive a valuation memorandum, a written report and a locked Excel model, delivered in 2 working days. Mark Ross Roberts FMVA CBCA does the work himself. Nothing is passed to a junior analyst.
| Annual turnover | Independent valuation | With funding feasibility |
|---|---|---|
| £500k to £5m | £1,200 | £1,700 |
| £5m to £10m | £2,000 | £2,500 |
| £10m to £30m | £3,000 | £3,500 |
| Above £30m | Scoped on the call | Scoped on the call |
All fees exclude VAT. Funding feasibility adds the bank debt a lender is likely to advance against the business and tests deal structures on debt service cover, which matters if you are selling to a management team or buying a competitor.
How to start: email Mark at mark@achieve-corporation.com with a line on the business and what the valuation is for. You get a reply the same day, then a free discovery call that confirms the right report, the fee and the turnaround. Nothing is payable until you agree to go ahead.
Email Mark for a free discovery callFrequently asked questions
I've had an offer for my food manufacturing business. How do I know if it's fair?
Before you reply, compare it with an independent valuation built from your own accounts, retailer terms and stock records. That shows what a buyer is likely to pay for the factory and its listings, how much of the headline reaches you once asset finance, rebates owed and working capital are deducted, and where the offer has room to move.
Is an independent valuation worth it if I already have a broker's figure?
A broker's figure for a food business is often given to win your instruction, and it rarely survives the buyer reconciling your rebates and writing down short-life stock. An independent valuation has no stake in the number. It makes those corrections first and shows each one, so you have something to test the broker's figure against. At a fixed fee from £1,200 excluding VAT, it costs less than one point off the multiple on almost any deal.
Will you try to sell me a sale mandate afterwards?
No. The valuation is a standalone engagement with a fixed fee agreed up front, and the fee is the same whatever the number. The report is yours to show anyone, including the buyer. Owners of food businesses rarely go on to ask us to sell after a valuation, although it has happened, and you are under no obligation to instruct us for anything else. Most use the report to negotiate with a buyer who has already approached them, or to plan the next few years of the factory.
How much is my food manufacturing business worth?
There is no reliable rule of thumb. The value depends on how dependent you are on your largest retailers, how quickly cost increases reach your prices, the condition of the factory and its audit record, and whether recent profits survive a proper look at rebates and stock. A multiple of EBITDA comes at the end of that work, followed by deductions for debt, asset finance, rebates owed and working capital at completion. Published averages are drawn from larger companies with different customers and cost bases, so we do not quote a range for food manufacturers.
Most of my sales go to one or two supermarkets. How much does that take off the price?
Enough to matter, and how much depends on the terms behind those sales and how long the relationships have run. A buyer will usually discount the price, defer part of it until the accounts are shown to stay, or both. The valuation measures the exposure and shows what it is likely to cost you, so you can decide whether to sell now or spread the business first.
We supply the supermarket on purchase orders with no signed contract. Does that matter?
Yes. A buyer values revenue by the paperwork behind it, and rolling purchase orders read as revenue the retailer can move at short notice. The Groceries Supply Code of Practice gives suppliers to the designated retailers some protection, including reasonable notice before de-listing, but a signed supply agreement with clear price review terms is worth more in a sale.
Are retailer rebates and promotional funding deducted from the price?
Often, yes. Rebates, overriders and promotional contributions earned by the retailer but not yet settled are usually treated as debt-like items and deducted from the equity value. If they were under-accrued, earnings are restated as well. The valuation reconciles your accruals to the retailer terms before a buyer does.
Does our BRCGS grade affect the value?
Yes. It shapes how a buyer reads the factory. A consistent high grade on unannounced audits supports the price. A slipping grade, or major non-conformities in recent reports, leads to questions about capital expenditure and management, and those questions are usually answered with a lower offer.
Will the HFSS rules or packaging fees change what a buyer pays?
They can, where your forecast relies on things those rules have changed. Branded producers that grew through multibuy promotions or prime placement of products high in fat, sugar or salt need a forecast without them for England. Larger producers need packaging fees in the cost base at the rates actually charged. The valuation builds both in.
Is the valuation confidential?
Yes. An NDA is available before you share any figures, and your staff, retailers and suppliers are not contacted.
Sources:
- BDO, Private Company Price Index Q3 2024
- BDO, Private Company Price Index Q1 2024
- Groceries Code Adjudicator, Annual Report and Accounts 2025 to 2026 (2026 annual survey)
- UK government, Groceries Supply Code of Practice
- Department of Health and Social Care, Restricting promotions of products high in fat, sugar or salt by location and by volume price
- Defra, Extended producer responsibility for packaging: who is affected and what to do
- Defra, Extended producer responsibility for packaging: 2025 base fees
- The Food (Promotion and Placement) (England) Regulations 2021, regulations 1 and 5
Valuation guides: EBITDA analysis · Earnings multiples · Asset-based valuation · Discounted cash flow
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